17.3.2. Sendmail says ``mail loops back to myself''

This is answered in the sendmail FAQ as follows:-

          * I am getting "Local configuration error" messages, such as:

          553 relay.domain.net config error: mail loops back to myself
          554 <user@domain.net>... Local configuration error

          How can I solve this problem?

          You have asked mail to the domain (e.g., domain.net) to be
          forwarded to a specific host (in this case, relay.domain.net)
          by using an MX record, but the relay machine does not recognize
          itself as domain.net.  Add domain.net to /etc/sendmail.cw
          (if you are using FEATURE(use_cw_file)) or add "Cw domain.net"
          to /etc/sendmail.cf.
	  

The sendmail FAQ is in /usr/src/usr.sbin/sendmail and is recommended reading if you want to do any ``tweaking'' of your mail setup.